Nexxus Petro Industries IPO: An In-Depth Analysis – Is It Worth the Investment?

Introduction to Nexxus Petro Industries IPO

Nexxus Petro Industries is a relatively lesser-known name in the petrochemical sector that has recently brought its IPO into the market with an intention to consolidate market presence and extend further operations. The specifics of the IPO of Nexxus Petro Industries have been dipped into in this blog for an in-depth analysis for potential investors.

Nexxus Petro Industries: Shaping India’s Infrastructure Future

The proceeds from this IPO will be used for:
Day-to-day operations: To assist in financing the daily activities, general corporate purposes. This could involve debt repayment or expansion.

Nexxus Petro Industries IPO Details

• IPO Dates: The issue opened for subscription on September 26, and closed on September 30, 2024.
• Issue Size: The IPO size is about ₹19.43 crores in total to be raised at a fixed price of ₹105 per share through 18.5 lakh shares.
• Listing: Proposed to list on the BSE SME exchange platform, on October 4, 2024.

The table summarizes the important dates from the opening of the subscription to the listing of company shares on the stock exchange.

Event	Date
IPO Opens	September 26, 2024
IPO Closes	September 30, 2024
Basis of Allotment Finalized	October 1, 2024
Refunds Initiated	October 2, 2024
Credit of Shares to Demat Account	October 3, 2024
Listing Date	October 4, 2024

Here’s the table summarizing the details for Nexxus Petro Industries IPO:

IPO Details	Information
Company Name	Nexxus Petro Industries Limited
IPO Size	₹19.43 crore
New Issue	₹19.43 crore (18.5 lakh equity shares)
Price Band	₹105 per share
Face Value	₹10 per share
Listing Exchange	BSE SME
Minimum Bid Lot	1,200 shares
Minimum Investment	₹126,000
Issue Type	Fixed Price Issue
Issue Category	SME IPO
QIB Allocation	50%
NII Allocation	15%
Retail Allocation	35%
Company Sector	Petrochemicals (Bitumen and related products)

Nexxus Petro Industries IPO Financial

Here is an analysis through the financials given of Nexxus Petro Industries Limited:

Revenue Growth

• 2023-24: ₹23,837.57 Lakhs
• 2022-23: ₹14,283.95 Lakhs
• Growth: An enormous 67% growth in the last year, showing that there is lots of demand in the market or that the company’s operations have picked up appreciably.

Profitability

• Profit After Tax (PAT):
• 2023-24: ₹348.47 Lakhs
• 2022-23: ₹200.87 Lakhs
  Growth- The PAT rose by an astonishing 73%. It is not just the revenue growth but the efficiency or cost management improvement as well.

Assets

2023-24: ₹3,892.55 Lakhs
2022-23: ₹1,644.96 Lakhs
In Two Years: Assets have doubled up; might be because of new investments or acquisitions that the company has done.

Net Worth

2023-24: ₹863.4 Lakhs
2022-23: ₹264.93 Lakhs
Upswing: The extreme increase has been reported due to retained earnings or capital brought in that enhanced equity.

Reserves and Surplus

• 2023-24: ₹353.4 Lakhs
• 2022-23: ₹254.93 Lakhs
• Remarks: Somewhat a growth and profits are retained for future stability or growth.

Total Debt

• 2023-24: ₹2,161.43 Lakhs
• 2022-23: ₹835.1 Lakhs
• Remark: This shows a good amount of surge in the debt may be required for expansion or may be an increased requirement for working capital .

Comparative Table for recent years

Financial Indicator	2023-24 (in ₹ Lakhs)	2022-23 (in ₹ Lakhs)	Change/Growth
Assets	3,892.55	1,644.96	+137% Increase
Revenue	23,837.57	14,283.95	+67% Increase
Profit After Tax	348.47	200.87	Improved by 73%
Net Worth	863.4	264.93	+226% Increase
Reserves and Surplus	353.4	254.93	+39% Increase
Total Borrowing	2,161.43	835.1	+159% Increase

• Asset Growth: The company has pushed assets significantly up, which may reflect investment in infrastructure or acquisitions aiming to expand operations.
• Surge in Revenue and Profit: Strong growth in both revenue and PAT could suggest the good business operations of the company or market expansion, which may have been due to sector-specific booms or strategic decisions.
  The financial health is strong with increased borrowings, as with an increase in net worth and reserves, the company is using its leverage to its optimum, possibly for growth while keeping a healthy equity base.

This financial analysis would give prospective investors an insight into the operational efficiency, growth trajectory, and what financial strategy Nexxus Petro Industries needs to plough ahead with, all crucial considerations determining the prospects of its IPO.

Nexxus Petro Industries IPO GMP and Subscription

As of September 28, 2024, here’s how things stand with Nexxus Petro Industries IPO in relation to GMP and subscription:

• GMP: The gray market premium for the IPO of Nexxus Petro Industries has been quoted at zero for the latest GMP, which may reflect a flat listing at issue price of ₹105 per share. This indicates that the gray market may contain fewer premium or discount; hence it is the market that is currently neutral or less enthusiastic on possible listing gains.
• Subscription Status: On its very first day of subscription, the IPO of Nexxus Petro Industries had reached a total subscription of 0.38 times. This number indicates that the IPO did not do so well in terms of subscription during the first day, which can be an indicator of a hesitant tendency among investors or maybe lesser interest in the market on the opening day.
• IPO Details Summary:
• Price Band: ₹105 per share.
  IPO Size: It would increase Rs 19.43 crore through the issuance of 18.5 lakh shares.
  It would raise funds for working capital and general corporate purposes, which would be applied for operational expansion or sustenance rather than specific project financing.
  Market Lot Size: A smaller lot can be applied at a minimum value of 1,200 shares, thereby requiring an investment of ₹126,000.

Zero GMP and subdued subscription can be construed as a signal of conservative valuation or lack of growth prospects or innovative business model by the company perceived by possible investors. The same scenario may offer an investor who seeks value where strong fundamentals of the company did exist and market sentiment shifts in post-listing time.

Remember that any rate of gains from an IPO, particularly listing gains, can be subject to numerous influences not necessarily predictable from prelisting data alone. Always take such findings as part of a much broader analysis before investment decisions.

Nexxus Petro Industries IPO EPS and PE Ratio

Based on information available till date on September 28, 2024, here is the EPS and PE Ratio for the IPO of Nexxus Petro Industries:

• Earnings Per Share (EPS): EPS during the year ended March 31, 2024, was ₹8.99. It is the portion of profits each equity shares carries, which forms a basis for judging the valuation of the equity stock.
• Price to Earnings Ratio (P/E Ratio): The P/E ratio for Nexxus Petro Industries, based on the latest financial data and the IPO price band of ₹105 per share, works out to approximately 11.68 times. This has been deduced based on the IPO price divided by the EPS for FY24 – ₹105 / ₹8.99.

Again, as the highlighted items in the weighted average EPS from last three years at ₹80.46 would fetch the P/E multiple into line with around 16.77 times when offer price is applied, this reflects how the market places a present day value on the potential future earnings of a company relative to past.

Market Position of Nexxus Petro Industries

Nexxus Petro Industries is involved in a niche business area by way of the manufacture of bitumen products and others. Benefits as follows:

• Government Infrastructure Projects: The higher the road construction, the greater the demand for bitumen.
• Market Share: Not the biggest but has its priority on quality, and it is close to ports, so that gives some competitive advantage.

Risks and Concerns for Nexxus Petro Industries IPO

• Market Competition: Petrochemicals are highly competitive in nature. The large companies may have more control over Nexxus.
• Government Fuel Policy and Infrastructure: Changes in government policies may decrease profitability.
• Oil Price Volatility: The company is sensitive to fluctuations in the global oil market.